Which of the Following Is the Appropriate Basis of Accounting

question 39

Multiple Choice

Which of the following is the appropriate basis of accounting for an agency fund?

• A) Cash basis.
• B) Modified cash basis.
• C) Accrual basis.
• D) Modified accrual basis.

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Definitions:

Journal Amounts

Journal amounts represent the values recorded in a financial journal, depicting transactions in monetary terms for accounting purposes.

Ledger Accounts

Records that summarize all transactions related to a specific account within an accounting system.

Posting

The process of recording financial transactions in the ledger from the journal in accounting.

Journalized Transactions

The formal recording of financial transactions in the accounting journals as part of the double-entry bookkeeping system.